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INCOME TAX ASSESSMENT ACT 1997 - SECT 328.253 Deductions for cost addition amounts

INCOME TAX ASSESSMENT ACT 1997 - SECT 328.253

Deductions for cost addition amounts

  (1)   This section applies in working out the amount that the transferor or transferee can deduct for the BAE year under subsection   328 - 180(2) or 328 - 190(3) for expenditure incurred by the transferor or transferee during the BAE year that is included in the second element of the * cost of a depreciating asset.

Expenditure incurred by transferor

  (2)   If the expenditure was incurred by the transferor, the amount that can be deducted under subsection   328 - 180(2) or 328 - 190(3) for the BAE year is split equally between:

  (a)   the transferor and the transferee; or

  (b)   if there are 2 or more occurrences of * balancing adjustment events for relevant entities for the BAE year and a roll - over is chosen for each occurrence--the entities concerned.

Expenditure incurred by transferee

  (3)   If the expenditure was incurred by the transferee:

  (a)   the transferor cannot deduct anything for the expenditure for the BAE year; and

  (b)   the amount that can be deducted under subsection   328 - 180(2) or 328 - 190(3) for the expenditure for the BAE year is:

  (i)   deductible by the transferee; or

  (ii)   if there are 2 or more occurrences of * balancing adjustment events for relevant entities for the BAE year and a roll - over is chosen for each occurrence--split equally between the entities concerned.

Special rule for expenditure on assets costing less than $1,000

  (4)   Subsection   (5) applies if:

  (a)   the transferor incurred the expenditure in relation to an asset of a kind mentioned in paragraph   328 - 180(1)(b); and

  (b)   a * balancing adjustment event occurs for that asset before the BAE day.

Note:   This threshold may be affected by section   328 - 180 (about temporary increased access to accelerated depreciation) or 328 - 181 (about temporary full expensing) of the Income Tax (Transitional Provisions) Act 1997 .

  (5)   The transferee cannot deduct anything for the expenditure for the BAE year, and subsection   328 - 215(4) does not apply to the transferee in relation to the asset.

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